Explosive allegations about tech price increases in South Africa
At least two prominent South African online PC hardware retailers believe that some major tech distributors could be exploiting the global memory crunch to inflate their prices and boost profits.
The prices of DDR5 RAM and NAND flash memory used in SSDs have skyrocketed due to surging demand for processing power and storage in artificial intelligence (AI) applications.
Earlier in 2026, local stores including Evetech, Wootware, Dreamware Tech, and Progenix confirmed that many DDR5 products’ prices had more than tripled since the shortage emerged in late 2025.
Mobile networks, including Vodacom, MTN, and Cell C, have also warned that the issue will affect smartphone and laptop prices.
However, more recently, MyBroadband received a message from the owner of a PC retailer expressing concern that one distributor could be using the opportunity to gouge prices.
“There is a specific supplier that phoned us, letting us know that pricing is going to increase from next week [23 to 29 March 2026],” they said.
“They are talking about increases of thousands at a time and are encouraging their retailers to purchase now to ‘beat the price increase’.”
The retailer reached out to a few suppliers after the call and found that no other distributor had indicated price increases. “I question whether they are just trying to drum up a few sales,” he said.
The retailer was concerned that the supplier’s behaviour could encourage other distributors to raise prices even when costs haven’t increased.
“When the first RAM price hikes started, one supplier increased their pricing exponentially, then it was just a matter of time before the other suppliers got wind of it,” he said.
“It’s not like I’m saying there isn’t a shortage; there definitely is, but it’s starting to feel like it is any excuse nowadays to increase pricing and create a feeling of scarcity in the market.”
Most distributors know gouging is risky
MyBroadband followed up with several other major PC hardware retailers to hear whether they had noticed something similar.
One store owner said they also had an issue with another distributor’s price increases but were unaware of more price increases at the majority of distributors.
While he believed a handful tried to gouge prices during the early days of the memory shortage, almost all quickly backtracked.
The owner explained that distributors, in general, were not eager to gouge prices, as their stock is not selling, even at prices from a month or two ago.
“Retailers aren’t going to stockpile at today’s pricing when pricing from several increases ago was already more than the market was willing to pay,” he said.
“No business wants to lose sales across the board because they’ve made a few segments unaffordable by gouging.”
He also explained that distributors’ product managers often worked on commission and had sales targets.
“If they can’t reach their targets, it affects their pockets personally, so they’re doing what they can to reduce pricing and get sales,” he said.
“More than one product manager has told me they’re considering moving to a different industry, as they’re running the lowest margin they’re allowed to and not getting a fraction of the sales they need.”
The retailer said RAM prices had increased by about 500% since the shortage began in late 2025.
While sales volumes have remained fairly stable, the retailer has found that business customers have shifted towards older CPUs that can be paired with more affordable DDR4 RAM.
Enthusiast PC builders are also buying lower-end graphics cards with cheaper or less graphics memory. More people are also spending money on peripherals or aesthetics instead of extra storage.
Loading ...